Market Information and Signaling in Central Bank Operations, or, How Often Should a Central Bank Intervene?
Electronic Access:
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Summary:
A central bank must decide on the frequency with which it will conduct open market operations and the variability in short-term money market that it will allow. It is shown how the optimal operating procedure balances the value of attaining an immediate target and broadcasting the central bank’s intentions against the informational advantages to the central bank of allowing the free play of market forces to reveal more of the information available to market participants.
Series:
Working Paper No. 1997/028
Subject:
Banking Central bank operations Central banks Financial markets Financial services Market interest rates Money markets Open market operations Short term interest rates
Notes:
Also published in Staff Papers, Vol. 44, No. 4, December 1997.
English
Publication Date:
March 1, 1997
ISBN/ISSN:
9781451844627/1018-5941
Stock No:
WPIEA0281997
Pages:
28
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